Pennsylvania accountant charged with embezzlement

by AccountingWEB on Dec 3 2009printer friendly

More and more, the news is filled with reports of bookkeepers, accountants, tax preparers, and other financial advisors caught with their hands in the client's till - or the taxpayers' pocket -- in one way or another. Are tough financial times giving rise to more theft by those with access to cash? The National White Collar Crime Center says fraud and embezzlement go up during economic downturns. Other theories suggest that fraud doesn't necessarily increase, but when profits are thin or nonexistent, the boss takes a closer look at the details that make up the bottom line. According to Certified Fraud Examiner Tracy L. Coenen (in an article in AllBusiness.com) a slow economy not only makes business owners watch more carefully, but when they find discrepancies, they are more likely to prosecute the perpetrator. More prosecutions mean greater visibility and the perception of rising incidences of fraud. Take a look at what happened in this case.

Just days ago an accountant entrusted with the books of two shops owned by the same man in Lancaster, Pennsylvania, was arrested for stealing more than $153,405 from his employer over a period of several years.

Seventy-two year old Glenn L. Martin of Manheim Township managed the accounts for the Fifth Avenue Card Shop and Plush Place (which has since closed down), both located in the Park City Center Mall, and both owned by Dan Kovalsky.

Last August, Kovalsky began to notice some discrepancies in the books of his two stores. An investigation showed that Martin had begun stealing from Kovalsky, in a variety of ways, as early as seven years ago. Here's a breakdown of what happened.

From 2002 to 2005, Martin wrote checks to himself, including one for $22,611 in 2003.

Because he was responsible for making certain monetary payments on behalf of the shops, he was entrusted with the use of a rubber stamp bearing his boss's signature. To cover the payments to himself, he falsified entries in a ledger, according to an affidavit filed in the matter.

In years 2004 to 2009, Martin wrote extra paychecks to himself. In 2008 alone, the additional payments totaled $6,580.

He also falsely inflated his work hours in 2003 to 2009, then paid himself for the extra time. In 2008, the additional payments totaled $22,783.

Martin is being held in the Lancaster County Prison, on $50,000 bail. He has been charged with eight counts of theft by unlawful taking of money. He was arraigned by District Court Judge Mary Sponaugle.